Equipment and Inventory Reserves

Equipment Reserves

Academic Departments:

Departments may choose to set aside funds for the purpose of maintaining and replacing shared items of departmental equipment. Funds may be obtained by levying a charge against Research grants and contracts, for the use of those items equipment.

Where a granting agency prohibits this practice such charges will not be permitted.

When pooled equipment funds are established and charges levied, the following conditions apply:

• The purpose of the fund should relate to the purpose of the charges, that is to say that where charges are levied the funds collected should be used to maintain and replace shared items of equipment and not be allowed to accumulate indefinitely.
• The department should have documentation which supports both the formulation of the rate charged and its application to individual research projects (e.g. a log of usage).
• The department must be prepared to defend the reasonableness of its charging policy in the face of external scrutiny.

Non-Academic Departments:

Non-academic departments may choose to set aside and accumulate funds, from their operating budget, for the acquisition and/or replacement of equipment. The creation of an equipment reserve implies an on-going annual commitment and the amount of the reserve and the annual contribution should be reviewed each year as part of the department's planning and budgeting process Equipment reserves are subject to the following conditions:

• the annual budget must be established in the 01 budget minor code
• any changes to the budget during the year must have the written approval of the appropriate vice-Principal
• the free balance in the 01 minor code will be automatically carried forward at year. end
• Expenditures from reserve funds must be requested through and approved by the appropriate vice-Principal, whereupon a transfer will be made from the 01 to 02 Equipment Purchases/Computer or 04 Equipment Purchases/Other budget (the equipment purchased should be charged against these codes)

Inventory Reserves

Departments may choose to purchase commonly used items, such as laboratory supplies, in bulk (thereby obtaining those items at a lower unit price than would otherwise be the case) and levy a charge against research grants, contracts. and other users for the use of such items.

Where a granting agency prohibits this practice such charges will not be permitted.

When pooled inventory funds are established and charges levied the following conditions apply:

• The purpose of the fund should be to achieve savings in respect of expenditure on commonly used items.
• The department should have documentation which supports the calculation of the price charged and the cost to individual users.
• The department must be prepared to defend the reasonableness of its charging policy in the face of external scrutiny.
• Where the value of inventory held is greater than $10,000 and flow through is greater than $50,000, special accounting procedures should be implemented.

The operation of pooled inventory funds should be monitored closely by department heads.